Residential water demand analysis

Abstract

This paper presents an estimate of the water demand in Distrito Federal, a Federative Unit of Brazil where the capital of Brazil is located. We develop a water demand model based on the tariff structure to capture the essential aspects of water use by companies and by consumers. For water companies, knowledge of the demand curve provides necessary information needed to set rates that promote an increase in their revenues. For consumers, knowledge of the evolution of water prices is important for the formulating of policies to rationalize consumption. We analyze the residential water demand behavior in two categories of consumers: normal and popular. The demand for water in the study was inelastic in relation to price and income for both the normal and popular customer categories.

Keywords

• water market
• water policy
• econometrics
• water scarcity